A 25-story office tower next to the Transamerica Pyramid just hit the San Francisco market with a price tag suggesting its owner is ready to take a loss to cash in on the city's office rebound. Beacon Capital Partners has listed 655 Montgomery Street, also known as Montgomery Washington Tower, with pricing guidance of roughly $150 million, or about $550 per square foot for the 273,272-square-foot property.
That figure would mark a steep discount from what Beacon paid to acquire the building. According to The Real Deal, the Boston-based investor bought the tower in 2019 for $191.5 million, or about $728 per square foot, and Beacon disclosed neither a reason for the sale nor an asking price. The 2019 purchase was structured as a joint venture with the California State Teachers' Retirement System, according to Institutional Real Estate, Inc., meaning the public pension fund has a direct stake in how this sale plays out. Beacon also sank another $15 million into capital improvements at the property, per the same reporting.
A Tower Split Between Offices, Shops and Luxury Condos
Built in 1984 and renovated in 2023, 655 Montgomery Street sits at the intersection of the Financial District, Jackson Square and North Beach, directly across from the Transamerica Pyramid. The building is structured as a mixed-use condominium: office floors run from 4 through 19, ground-floor retail and garage parking occupy the first three levels, and a fitness amenity center sits on floor 20, according to JLL offering materials. Seven upper floors hold separately owned luxury residential condominiums accessed at 611 Washington Street, and are not part of the commercial sale.
The commercial stack comes with a fitness center, conference center, yoga studio and tenant lounge. Per JLL's offering materials, the office space is currently 87 percent leased with a weighted average lease term of 4.5 years — an occupancy rate that outperforms the broader market, where San Francisco's office vacancy sits at just under 30 percent, per JLL data cited by the Business Times.
Protected Views Command a Premium
JLL is marketing the property as part of the Pyramid District, the cluster of buildings surrounding the Transamerica complex, leaning heavily on its outlook toward the Golden Gate Bridge, Coit Tower and the Bay. Height restrictions over North Beach and Chinatown preserve unobstructed views from the sixth floor up, and that scarcity has translated into pricing power: office space with those protected sightlines carries just a 5.1 percent vacancy rate, according to The Registry, versus nearly 30 percent citywide. View-oriented office rents in San Francisco have climbed 40 percent year-over-year, according to broker data cited in the same report.
Neighbors Are Cashing In Too
Beacon's listing lands amid a wave of activity in the immediate area. Cyprus-based investment firm Yoda PLC paid $691.6 million for the Transamerica Pyramid complex this year — a deal that worked out to roughly $922 per square foot — and has since signed seven new office leases totaling 113,000 square feet through July, per The Real Deal. That leasing momentum, paired with a citywide surge in demand from artificial intelligence firms detailed in Hoodline's October reporting on the city's office market, is reshaping expectations for what buyers will pay near the Pyramid District.
Elsewhere downtown, 221 Main Street — anchored by DocuSign and nearly fully leased — hit the market with guidance of about $650 per square foot. Institutional investors are increasingly circling San Francisco, betting on the city's recovery and its AI-driven leasing boom.
Comparable Sales Show a Market in Flux
Recent trades illustrate how wide the pricing gap has become between distressed and stabilized assets. Madison Capital bought the 34-story tower at 45 Fremont Street for $238 million, or about $437 per square foot, in a benchmark trade for the Financial District. Strada Investment Group, meanwhile, paid $103 million — roughly $771 per square foot — for the fully leased, timber-frame 1 De Haro Street building in Potrero Hill, a deal that could set a benchmark for how stabilized assets get priced going forward.
Overall, office investment sales have been hovering around $400 per square foot, according to one market source, making both the Transamerica and 1 De Haro deals outliers on the high end. Office property values are beginning to climb alongside rent growth, a shift that follows Hoodline's earlier coverage of UBS relisting its own downtown tower at 455 Market Street after pulling it from the market in 2022. Whether Beacon can find a buyer willing to meet its $150 million guidance will offer another read on just how far San Francisco's office recovery has come.
